Dba Sempra · NYSE:SRE
Dba Sempra — Q2 2020 Earnings Presentation
34 slides from Dba Sempra's earnings presentation, Aug 5, 2020
Slide 1: Second Quarter 2020 Earnings Results
Sempra Energy Second Quarter 2020 Earnings Results August 5, 2020
Slide 2: Information Regarding Forward-Looking Statements
Information Regarding Forward-Looking Statements This presentation contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on assumptions with respect
Slide 3: Table of Contents
Table of Contents ▪ Executive Summary ▪ Building North America’s Premier Energy Infrastructure Company ▪ Strong + Sustainable Business Model ▪ Disciplined Capital Allocation ▪ ~$13B of Capital Returned to Shareholders ▪ U.S. Utility Infrastructure ▪ North American Infrastructure ▪ Financial Update ▪
Slide 4: Executive Summary
Executive Summary ▪ Strategic repositioning of our business has improved earnings quality and visibility to future growth • Completed two-year capital rotation program with total gross proceeds of ~$8.3B(1) • Continued to execute on utility-centered capital program and deferred $500M of infrastructu
Slide 5: Building North America's Premier Energy Infrastructure Company
Building North America’s Premier Energy Infrastructure Company Delivering superior operational and financial results while completing a robust capital rotation program Geographic Focus 2-Year Capital Recycling Program Enterprise Excellence in Execution (1) Value ✓ Purchased ~80% int. in Oncor ~$15.3
Slide 6: Strong + Sustainable Business Model: Safety + Operations
Strong + Sustainable Business Model Safety + Operations At Sempra, we have built a business model capable of successfully operating in a variety of challenging environments Safety + Sustainability T+D Operations ▪ Continuing to engage with public health ▪ California Utilities | Decoupled revenues au
Slide 7: Strong + Sustainable Business Model: Higher-Value, Lower-Risk Infrastructure
Strong + Sustainable Business Model Higher-Value, Lower-Risk Infrastructure In addition to focusing on the best markets in North America, we are investing in the portion of the energy value chain that we believe will provide the most attractive risk-adjusted returns Sempra Business Model Exploration
Slide 8: Disciplined Capital Allocation
Disciplined Capital Allocation Focused strategy supports improved earnings visibility, strengthens our balance sheet and returns value to shareholders Executing Capital Plan ▪ Progressed our record ~$32B 5-year capital plan centered around our U.S. utilities(1) ▪ Projected rate base growth across al
Slide 9: ~$13B of Capital Returned to Shareholders
~$13B of Capital Returned to Shareholders $M $14,000 Total Capital Returned $4.50 (1) (1) Share Buybacks Dividends Paid Total Capital $12,000 ~$3B | ~74M shares ~$10B ~$13B $4.00 $3.50 $10,000 $3.00 Dividend Per Share (DPS) $8,000 $2.50 Total Capital $6,000 $2.00 $1.50 $4,000 $1.00 $2,000 $0.50 $0 $
Slide 10: U.S. Utility Infrastructure
U.S. Utility Infrastructure Continuing Strong Execution in California + Texas SDG&E ▪ CPUC approved Wildfire Mitigation Plan ▪ Successfully procured in excess of the required $1B of wildfire insurance under a balanced program to comply with AB 1054 wildfire fund requirements ▪ Continuing to execute
Slide 11: North American Infrastructure
North American Infrastructure Across our infrastructure business, we are taking a disciplined approach towards capital allocation; we have deferred ~$500M of capital in 2020 Operations Status Cameron LNG Phase 1 | Construction complete(1) ▪ First cash distribution received in Q2-2020; full run-rate
Slide 12: Second Quarter 2020 Results
Second Quarter 2020 Results Strong improvement in operating earnings helps drive over 50% increase in year-to-date adjusted EPS over the same period last year(1) Three months ended Six months ended June 30, June 30, (Dollars, except EPS, and shares, in millions) 2020 2019 2020 2019 (Unaudited) GAAP
Slide 13: Q2-2020 Adjusted Earnings Drivers
Q2-2020 Adjusted Earnings Drivers (1) $31M ($49M) $65M (4) ($32M) (3) ($40M) $75M (1) $485M (2) $126M (1) $309M Q2-2019 CA Utilities CPUC Base Cameron Oncor + Lower Higher FX Other Q2-2020 Regulatory Operating LNG InfraREIT Earnings at SA Costs + Tax Decision Margin Earnings Earnings Businesses Expe
Slide 14: Sempra is a Leader in Sustainability
Sempra is a Leader in Sustainability Sempra Continues to Lead the Sector with Strong Sustainability Ratings ▪ MSCI ESG rating of A compared to BBB of our peers ▪ CDP score of A- compared to C of our peers ▪ Only U.S. Utility on Dow Jones Sustainability World Index Recently Released Sustainability Re
Slide 15: Summary
Summary ▪ Strategic repositioning of our business has improved earnings quality and visibility to future growth • Completed two-year capital rotation program with total gross proceeds of ~$8.3B(1) • Continued to execute on utility-centered capital program and deferred $500M of infrastructure capital
Slide 16: Appendix
Appendix
Slide 17: Enabling the Energy Transition
Enabling the Energy Transition Sempra is helping lead the energy transition in every market where we operate Segment Current Future Goal California | Helping to decarbonize California’s energy system ▪ Currently ~14% rooftop solar ▪ Continue to integrate renewable energy onto system ▪ Over 5,000 ele
Slide 18: Committed to our Financial Goals
Committed to our Financial Goals At our 2016 Investor Day, we laid out our 2020 EPS guidance range of $7.20 – $7.80; since then, we improved the quality and visibility of future earnings while remaining on-track to deliver our $7.20 – $7.80 adjusted EPS guidance range(1) ▪ Narrowed strategic focus o
Slide 19: Appendix: Business Unit Earnings
Appendix Business Unit Earnings
Slide 20: SDG&E
SDG&E Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 SDG&E GAAP Earnings $ 193 $ 143 $ 455 $ 319 ▪ Q2-2020 earnings are higher than Q2-2019 primarily due to: • $62M due to the release of a regulatory liability in 2020 related to 2016-2018 i
Slide 21: SoCalGas
SoCalGas Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 SoCalGas GAAP Earnings $ 146 $ 30 $ 449 $ 294 Impacts Associated with Aliso Canyon Litigation - - 72 - SoCalGas Adjusted Earnings(1) $ 146 $ 30 $ 521 $ 294 ▪ Q2-2020 earnings are highe
Slide 22: Sempra Texas Utilities
Sempra Texas Utilities Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 Sempra Texas Utilities GAAP Earnings $ 144 $ 113 $ 249 $ 207 ▪ Q2-2020 earnings are $31M higher than Q2-2019 primarily due to higher revenues from increased consumption a
Slide 23: Sempra LNG
Sempra LNG Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 Sempra LNG GAAP Earnings $ 61 $ 6 $ 136 $ 11 ▪ Q2-2020 earnings are higher than Q2-2019 primarily due to $65M higher earnings from Cameron LNG JV mainly due to Train 1 and Train 2 co
Slide 24: Sempra Mexico
Sempra Mexico (1) Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 Sempra Mexico GAAP Earnings $ 61 $ 73 $ 252 $ 130 ▪ Q2-2020 earnings are lower than Q2-2019 primarily due to: • $6M lower earnings at the Guaymas-El Oro segment of the Sonora
Slide 25: Discontinued Operations (Sempra South American Utilities)
Discontinued Operations (Sempra South American Utilities) (1) Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 Discontinued Operations GAAP Earnings $ 1,775 $ 70 $ 1,847 $ 19 Gain on Sale of South American Businesses (1,754) - (1,754) - Chang
Slide 26: Parent & Other
Parent & Other Three months ended Six months ended June 30, June 30, (Unaudited, dollars in millions) 2020 2019 2020 2019 Parent & Other GAAP Losses $ (141) $ (127) $ (389) $ (244) Losses from Investment in RBS Sempra Commodities LLP - - 100 - Reduction in Tax Valuation Allowance Against Certain NOL
Slide 27: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures
Slide 28: Adjusted Earnings and Adjusted EPS (Unaudited)
Adjusted Earnings and Adjusted EPS (Unaudited) Adjusted Earnings (Losses) and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2020 and 2019 as follows: In the three months ended June 30, 2020: • $1,754M gain on the sale of our South Amer
Slide 29: Adjusted Earnings and Adjusted EPS (Unaudited)
Adjusted Earnings and Adjusted EPS (Unaudited) Income tax Income tax Pretax expense Pretax expense amount (benefit)(1) Earnings amount (benefit)(1) Earnings (Dollars in millions, except per share amounts; shares in thousands) Three months ended June 30, 2020 Three months ended June 30, 2019 Sempra E
Slide 30: Adjusted Earnings (Losses) by Business Units (Unaudited)
Adjusted Earnings (Losses) by Business Units (Unaudited) (1) Three months ended June 30, 2020 Sempra Sempra (Dollars in millions) Texas Sempra Parent & Discontinued Energy SDG&E SoCalGas Utilities Mexico Sempra LNG Other Operations Consolidated GAAP Earnings (Losses) $ 193 $ 146 $ 144 $ 61 $ 61 $ (1
Slide 31: 2020 Adjusted EPS Guidance Range (Unaudited)
2020 Adjusted EPS Guidance Range (Unaudited) Sempra Energy 2020 Adjusted EPS Guidance Range of $7.20 to $7.80 excludes items (after the effects of income taxes and, if applicable, noncontrolling interests) as follows: • $(72)M from impacts associated with Aliso Canyon natural gas storage facility li
Slide 32: 2016 Adjusted EPS Guidance Range (Unaudited)
2016 Adjusted EPS Guidance Range (Unaudited) Sempra Energy 2016 Adjusted EPS Guidance Range of $4.60 to $5.00 excludes items (after the effects of taxes and, if applicable, noncontrolling interests) as follows: • $350M noncash gain from the remeasurement of our equity method investment in IEnova Pip
Slide 33: 2017 Adjusted Earnings and Adjusted EPS (Unaudited)
2017 Adjusted Earnings and Adjusted EPS (Unaudited) Sempra Energy Adjusted Earnings and Adjusted EPS exclude items (after the effects of income taxes and, if applicable, noncontrolling interests) in 2017 as follows: • $(870)M income tax expense from the impact of the Tax Cuts and Jobs Act of 2017 (T
Slide 34: 2017 Adjusted Earnings and Adjusted EPS (Unaudited)
2017 Adjusted Earnings and Adjusted EPS (Unaudited) Income tax Non- Pretax expense controlling amount (benefit)(1) interests Earnings (Dollars in millions, except per share amounts; shares in thousands) Year ended December 31, 2017 Sempra Energy GAAP Earnings $ 256 Excluded items: Impact from the TC